Effective July 1, 2021, the KCB MPESA loan will attract an interest of 8.64%. KCB group introduced the new fee to its customers through a text message on Friday afternoon, quoting the assent of the Finance Act 2021 as the reason for the adjustment.
The loan fees increase comes just one day after President Uhuru Kenyatta approved the re-introduction of 20 % tax on all fees and commissions earned on loans making it a law.
Customers will have to bear the increased cost which will see Kenya Revenue Authority (KRA) receive over 7 billion from banks every year. Earlier, banks had opposed the move saying the cost will put pressure on the customers. Borrowers are already struggling to raise their usual installments due to the effects of COVID-19.
The excise duty, which was first introduced in 2018 increased ATM transactional cost, over-the-counter transactional cost, and other services such as Real-Time Gross settlement (RTGS).
KCB and NCBA group are among the first banks to send out a message to their customers informing them of the change.